Fractional Chief Automation Officer (Fr-CAO): A Practical Definition for Mid-Market Companies

1. Why "Chief Automation Officer" Exists At All

In most mid-market companies, everyone agrees on one simple idea: "We should be automating more of what we do."

The moment you say that out loud, a second wave of questions appears. Where do we start? Who owns this across the company? How do we know we are not missing bigger opportunities?

Recent research with global executives found that almost every C-suite claims they are already automating tasks, but almost half admit they struggle to choose the right tasks to automate and worry they are leaving value on the table. At the same time, surveys show that more than half of C-level leaders expect to add new roles such as Chief AI Officer or Chief Automation Officer in the next few years. Automation has stopped being a side project and turned into something that needs a real owner at the leadership table.

Analysts and vendors have started writing about a new role for exactly this problem: the Chief Automation Officer (CAO). They describe a CAO as the person who leads the strategy, rollout, and performance of automation across an organization, and who connects automation efforts directly to measurable business outcomes rather than just counting bots or workflows.

In large enterprises that is increasingly a full-time C-level job. In most mid-market companies, the need is real but the budget and headcount are not. That is where a Fractional Chief Automation Officer (Fr-CAO) comes in.

This document keeps things straightforward. It explains what a Chief Automation Officer is, what "fractional" actually means, who typically serves as a Fr-CAO, what they do, why and when you bring one in, when you should move on from the model, how this role differs from the rest of your C-suite, and who a Fr-CAO should report to.

2. What Is a Chief Automation Officer?

A Chief Automation Officer (CAO) is a senior executive who is accountable for how automation is used across the business. Most descriptions of the CAO role have the same core elements. The CAO sets an automation strategy that lines up with business goals. They oversee the design and rollout of automated processes and workflows. They influence or decide which automation platforms and tools the company should use. They define and track the metrics that show whether automation is actually working. And they work across departments so automation doesn't end up trapped as "that one team's project."

They are not just "the person who knows Zapier" or "the RPA lead." The job is to decide where automation belongs in the business, what "good" looks like, and how to scale it without making the company more fragile.

3. What Is a Fractional Chief Automation Officer (Fr-CAO)?

A Fractional Chief Automation Officer (Fr-CAO) is the same role in terms of responsibility, but delivered on a part-time basis instead of as a full-time executive.

Fractional executives are not casual advisors. They are senior leaders who work with a few companies at once and take on real executive responsibilities in each one. Typically they commit a certain number of days per month or quarter, participate in leadership meetings and planning cycles, and own specific outcomes in their domain. They also bring patterns and hard-won lessons from other companies facing similar issues. This fractional model has grown because it gives companies access to high-caliber leaders without the commitment of a full executive salary, bonus package, and long ramp time.

When you apply that model to automation, you get a Fr-CAO. They behave like a CAO, sit at the same table as your CEO, CFO, COO, or CTO, and own the automation and workflow agenda, but they do it a few days per month, often with a small delivery team behind them, instead of occupying a full-time executive headcount.

4. Who Typically Becomes a Fr-CAO?

Because the CAO title is still relatively new, many Fr-CAOs come out of adjacent roles where they have already had to orchestrate technology, process, and people.

Quite often they have led operations or revenue operations teams and run major automation initiatives. Others come from senior engineering or platform leadership, where they owned integrations and internal tooling. Some have grown up in data and analytics, using automation to deliver cross-functional reporting and insights. Others come from transformation and consulting backgrounds, where they've run multi-team automation programs.

Across those backgrounds, the same traits show up repeatedly. A strong Fr-CAO is comfortable with automation technologies like RPA, integration platforms, workflow tools, AI, and low-code systems. They have a track record in process improvement and operational excellence. They can talk to engineers without getting lost and talk to business leaders without hiding behind jargon. And they are usually good at managing change across departments.

The fractional twist is simply that this person doesn't work only for you. They apply that experience to more than one company at a time, which is part of why the model works well for mid-market firms that need senior leadership but can't yet justify a full-time CAO.

5. What a Fractional CAO Actually Does

It helps to move from definitions to real work. In practice, a Fr-CAO's time clusters around a few themes.

First, they help set direction. Together with your leadership team, they answer questions like: where will automation actually move the needle in this business, how do we connect automation projects to revenue, margin, or risk instead of just counting hours saved, and what should we tackle first. The output is usually not a huge deck but a simple, shared view of where automation belongs and in what order it should be addressed. Analysts who write about the CAO role often stress that this is the heart of the job: lining up automation decisions with business priorities, rather than with whatever tool is currently trendy.

Second, they take ownership of the automation portfolio itself. Most companies have more automation than they realize: scripts tucked away in a shared drive, vendor-provided bots, point-to-point integrations, and "random" workflows someone set up years ago. A Fr-CAO pulls this into a single view. They look at what already exists, whether it's working, what is fragile or risky, and where the obvious gaps are. From there, they treat automation like a portfolio, with a clear list of things in production, things being built, and things under consideration, along with a simple statement of expected value for each one.

Third, they focus everyone on real metrics. A good Fr-CAO does not celebrate the number of workflows or bots. They pay attention to revenue per employee, EBITDA impact from automation, avoided hires or redeployed headcount, and changes in cycle time and error rates in core processes. Vendors and analysts have pointed out that, as companies scale "intelligent automation," someone needs to be accountable for value and risk, not just implementation.

Fourth, they orchestrate execution. Sometimes that means leading internal builders. In other cases, it means coordinating with an external partner. In the InsidePartners Fr-CAO model, for example, the Fr-CAO is supported by an execution pod that designs, builds, and maintains automations so the client is not left carrying all of the technical risk alone. Either way, the Fr-CAO is the person who decides what gets built, in what order, and how to do it without adding more operational mess.

A core part of this orchestration is applying a clear build vs. buy vs. ignore framework to every automation decision. This ensures the company builds custom solutions only for true differentiators, buys off-the-shelf tools for commodity processes, and strategically ignores low-value workflows that should stay manual.

Finally, they manage the human side. Automation changes someone's day every time you ship it. A Fr-CAO explains why certain processes are being automated, works with managers on how to redeploy people, and helps the leadership team define sensible policies about quality, security, and ownership. None of that is glamorous, but it makes the difference between an automation program that sticks and one that creates resistance.

6. Why You Hire a Fr-CAO

You are usually close to needing a Fr-CAO when a few things all feel true at once.

Automation is already happening, but nobody really owns it. Marketing automates one thing, finance another, operations a third. IT is stuck trying to keep everything from breaking. If you ask, "What is our automation portfolio?" or "How much value is this creating?" you get long pauses.

You can feel tool sprawl. Like most mid-market operators, you probably have dozens of SaaS tools, each with its own automation features. Without someone responsible for the whole picture, work becomes more manual, not less, as people stitch those tools together by hand.

You need CAO-level thinking but a full-time CAO does not make sense yet. Full-time CAO roles often come with six-figure compensation, bonuses, and sometimes equity. For a company in the $3M–$50M revenue band that is a serious commitment, even though the automation problems have already arrived.

You also want a guide, not just another vendor. Fractional executives exist because companies want someone who is actually accountable but without the long-term risk of a permanent hire. In automation, that means someone who can sit beside your CEO, CFO, and COO and talk about automation in business terms, not just tool features. Learn more about how InsidePartners approaches Fr-CAO engagements.

7. When You "Fire" or Graduate From the Fr-CAO Model

A healthy fractional engagement has a clear end state from day one.

Sometimes the end state is very simple: you reach a scale where a full-time CAO makes sense. The automation portfolio is large, cross-functional, and strategic enough that you decide to hire an internal leader. In that case a good Fr-CAO should help you write the job description, interview candidates, and hand over the work.

In other cases, you don't hire a CAO at all. Instead, your existing leaders start to "think like a CAO." Your CFO, COO, and functional heads have their own automation roadmaps. There is a clear governance model, agreements on tools and standards, and a shared vocabulary for value and risk. When that is true, the Fr-CAO becomes less critical.

There is also a point where the job shifts from "build and prove" to "maintain and refine." Once the big gains have been made and your automation estate is relatively stable, you might not need a C-level automation owner. You might be better off with a smaller internal team or a manager-level leader.

It is also worth being clear about bad reasons to keep or fire a Fr-CAO. If they constantly chase new tools, can't explain impact in plain financial language, or keep the work opaque so you are dependent on them, you are not getting what you need. A good engagement should leave you more capable, not more reliant.

8. Why Fractional Instead of Full-Time?

For mid-market companies, fractional is usually not about "cheap." It is about matching the maturity of the role to the maturity of the company.

The most obvious advantage is cost and flexibility. You get access to senior leadership without committing to a full executive compensation package, and you can dial the engagement up or down as things change. Research on fractional executives often points out that this lower fixed cost is one of the main benefits.

Risk is another factor. If the fit is wrong, it is easier to change direction with a fractional arrangement than with a full-time executive who has been in the seat for years.

Speed matters too. Fractional leaders usually arrive with templates, patterns, and scars from other companies with similar problems. You get the benefit of that pattern recognition from day one, rather than hoping a new hire will figure it out over a long ramp.

Finally, a fractional model keeps your options open. You can start small, prove value, and then decide whether to hire a full-time CAO, continue with a fractional model, or hand the responsibility to another executive once the basics are in place.

9. How a Fr-CAO Differs From the Rest of the C-Suite

Because the role is new, there is understandable confusion about how it fits with the rest of the leadership team.

Compared to a CFO, the Fr-CAO does not own capital, reporting, or overall financial health. That is still the CFO's job. The Fr-CAO cares about how work gets done, including in finance. They might focus on automating reconciliations, invoicing, collections, and reporting workflows, all in service of the CFO's goals. Some research suggests that pairing CFOs with dedicated automation leadership allows them to run leaner teams without losing control.

Compared to a COO, the distinction is about scope. The COO is responsible for how the business runs day to day. The Fr-CAO focuses on the automation layer inside those operations. One simple way to explain it: the COO decides what needs to happen, and the Fr-CAO figures out how much of that can be reliably automated and instrumented.

Compared to a CIO or CTO, the Fr-CAO is not trying to take over infrastructure, security, or product engineering. Those things remain in the technology organization. The Fr-CAO cares about workflows that cross those systems and often sits closer to the business. Analysts who cover the rise of the CAO usually recommend that CAOs and CIOs operate as peers who work closely together, rather than competing for turf.

Compared to Chief Data, Digital, or AI Officers, the differences are more about emphasis than hierarchy. Data and analytics leaders focus on data governance and insight. Digital leaders focus on digital products and experiences. AI leaders focus on AI capabilities and risk. The Fr-CAO works with all of them, but stays anchored in a practical question: how do we turn these capabilities into better, faster, more reliable work across the company.

10. Who the Fr-CAO Should Report To

There is no universal answer for where a Fr-CAO should sit, but there are patterns that tend to work.

In many early CAO job descriptions, the role reports to the CEO, the COO, or the CFO. Reporting to the CEO makes sense when automation is a top strategic priority and touches almost every function. It also sends a clear signal that automation and AI are board-level topics, not just "IT projects." Reporting to the COO works well when the immediate focus is on operational efficiency and cross-team execution. Reporting to the CFO can be effective when the main driver is margin, cost, and capital allocation.

In some technology-heavy organizations, the CAO reports to the CIO or CTO. That can work, but it does carry a risk that the rest of the company will see the CAO as just another IT leader. If you choose that structure, it helps to give the CAO direct access to business leadership and to evaluate them on business outcomes, not just system performance.

For a fractional CAO in a mid-market company, a simple pattern tends to work well: formal reporting to the CEO or COO, with a dotted-line relationship to the CFO and CIO. That keeps automation decisions close to strategy and capital, while still respecting IT governance and security.

11. About InsidePartners

InsidePartners works with mid-market companies that want the benefits of a Chief Automation Officer but are not yet ready to commit to a full-time executive.

Clients typically bring in a named Fractional CAO who joins their leadership rhythm, ask that person to own an automation portfolio across finance, go-to-market, and operations, and rely on a small execution pod that actually builds and maintains the automations. Results are tracked in terms of Revenue Per Employee, EBITDA impact, avoided hires, and reductions in operational debt, rather than just counting "number of automations."

Whether you ever work with InsidePartners or not, the goal of this document is to give you a clear, practical definition of what a Fractional Chief Automation Officer is, how the role fits with your existing leadership team, and how to know if your company is ready for one.

If you want to see how this could look in your own context, you can find more detail and examples at insidepartners.ai.